Here's why this former CEO of IT company is worried for young Indian engineers

Traditionally, Indian IT was strong on cost optimisation, but newer demand on solutions for revenue growth called for new skills in artificial intelligence.ET CONTRIBUTORS | May 14, 2017, 11:50 IST

By Vineet Nayar

India’s outsourcing industry is facing a crisis of identity. Clearly, any industry with the same old proposition dies a quick death. Starting with Y2K, the industry went through three clear cycles (engineering services or R&D outsourcing, remote infrastructure management and BPO) and we kept getting new ways to drive growth.

However, now the industry is stalling, and unless there is a new product that is competitively priced, the industry will not grow. Due to economic slowdown in its target markets, the IT industry answered the cost question plaguing their clients well. But, around 2013, the questions asked of Indian firms shifted — from cost to revenue — and Indian IT didn’t sense the shift.

Complacent Companies

Traditionally, Indian IT was strong on cost optimisation, but newer demand on solutions for revenue growth called for new skills in artificial intelligence, analytics and the broad market for digital capabilities. While old shifts required incremental change, this move to focus on revenue required a dramatic shift — from back office to front and from India-centric resources to having more salespeople and analysts near shore who understood business, not just technology.

Amid this flux, the Indian industry got a bit complacent, since it was doing well and generating cash. Indian IT is a master when it comes to taking cost out of the equation, but when it comes to innovating to suit the needs of customers, it missed a trick or two. US President Donald Trump is giving Indian IT the shock treatment it needs to transform its business — it is now forced to do what it should have done at its own pace.

In all this, the ones who are the most affected are current and potential employees in India’s outsourcing industry. The number of jobs has gone down, startups have proven to be a mirage and the emergence of new technology trends such as robotics and automation will only make lives harder. Indian IT and BPO were a big employment engine, that is now stalling. I am really worried about young Indian engineers. First, the migrating population of engineers will probably stay on, putting pressure on engineering graduates — it is a big issue. If you are about to graduate as an engineer, you have tough times ahead.

The contention that engineering curriculum is outdated is an old conversation. That didn’t prevent the IT industry from booming — all it takes is three months of training for a civil engineer, to be absorbed into an IT programme. Even if they were to make curriculum current, who will hire the students? It comes down to creating industries in India, which are globally competitive, where jobs are created. Ideas like education and healthcare in special economic zones and mega ship building projects have to take off. I wish I could be more optimistic in my conversations with engineers. But honestly, for many of them, being self-employed to solve local problems may be their best bet. Skill up, apply your mind to new startups, use new tech like AI and that’s the future. The companies’ future is secure, the individual’s is not so secure.

Who Should Watch Out

Three levels of employees are under fire. Managers should get used to the fact that compensation will be flat, because their value addition is on old skills centred around managing resources, not creating value. Unless they re-skill and move away from managing (off shoreonsite ration, for example) to being value creators, they are in trouble. Junior employees, with one to five years of experience focused on low-end coding jobs, will have to skill at a dramatic pace to stay relevant — this is a class of people most threatened by automation.

Instead of waiting for companies to retrain, they need to up-skill themselves. This is one category where competition is going to become hugely competitive. You must be obsessed about re-skilling yourselves at a faster pace than the company expects.

However, the biggest problem is faced by potential employees — they won’t be given opportunities in new skill areas. They must pay their dues in low skill areas before moving up — competing with existing employees, with automation and with onshore employees. Youngsters are very worried by these trends.

Organisations aren’t employee-centric anymore, they are viewing them as resources — as use and throw. Second, employees are lazy, they need to take greater ownership of their future. We are reaching a situation where employees take responsibility — to think and try to stay current. Third, getting a job is not necessarily the answer; you must take risks. You need to move away from the old job mindset.

(The writer is chairman, Sampark Foundation, and former CEO of HCL Technologies)